Seoul, January 25, 2006
hynix Semiconductor Inc. (‘hynix’ or ‘the Company’, www.hynix.com) today announced the earnings results for its fourth quarter 2005, ended December 31, 2005.
The Company recorded the consolidated (which is the consolidation of the Company’s overseas subsidiaries) revenues of 1.77 trillion won which is a 10% increase compared to the previous quarter’s 1.6 trillion won, and an increase of 22% from 1.45 trillion won in the same period last year. Such growth in sales was mainly attributable to the significant increase in our NAND flash sales.
While the price of NAND flash has stayed pretty strong throughout the quarter, we have also managed to increase our NAND flash capacity to take advantage of such favorable market condition. On the other hand, our DRAM sales has slightly declined quarter-on-quarter, mainly due to a price decline in DRAM market that could not be completely offset by increased bit growth. Our DRAM revenue portion, as a result, has decreased from 70% in the third quarter to 60% in the fourth quarter while NAND flash memory and SRAM has increased from 30% to 40%.
We recorded operating profit of 522 billion won in the fourth quarter, a 6% increase from previous quarter’s 495 billion won. Compared to worsened financial results from some of our competitors during the same period, we have recorded relatively high operating profit margin of 30%, thanks to our competitive cost structure and the successful expansion of our NAND flash business. As a result, our EBITDA in the fourth quarter recorded 853 billion won, with EBITDA margin of 48%, which is an increase from 811 billion won of the previous quarter.
In the meantime, fourth quarter net income increased by 44% sequentially from 529 billion won to 764 billion won after reflecting deferred tax assets of 452 billion won. The amount of deferred tax assets that we have recognized during the quarter is based on the expectation that the Company will incur taxable income in the future and the Company’s deferred loss carried forward will be deducted accordingly, which eventually will have an effect of tax reduction.
As of the end of 2005, cash and short-term financial instruments increased to 1.28 trillion won, which is increased by 470 billion won from previous quarter’s 814 billion won. Our consolidated debt level at the end of the year remained almost flat sequentially to 1.9 trillion won, thus improving debt to equity ratio to 30% from the previous quarter’s 35%, and net debt to equity ratio to 10% from 20%.
Please note that the financial results discussed herein are preliminary and speak only as of December 31, 2005. Readers should not assume that this information remains operative at a later time. In addition, this information may include forward-looking statements that involve a variety of risks and uncertainties that could cause actual results to differ materially. For further discussion of these risks and uncertainties, readers should refer to hynix Semiconductor Inc.’s filings with the Korean Securities and Exchange Commission. This document is neither an offer to sell nor a solicitation of an offer to sell any security of hynix. hynix securities may not be sold in the United States absent registration or an exemption from registration under the U.S. Securities Act of 1933, as amended.
About hynix Semiconductor Inc.
hynix Semiconductor Inc. (HSI) of Icheon, Korea, is the world’s top tier memory semiconductor supplier offering Dynamic Random Access Memory chips (“DRAMs”), Static Random Access Memory chips (“SRAMs”) and Flash memory chips to a wide range of established international customers. The Company’s shares are traded on the Korea Stock Exchange, and the Global Depository shares are listed on the Luxemburg Stock Exchange. Further information about hynix is available at www.hynix.com.
